Using A Free Tax Service To Prepare Your State Return? If You Don't Pay, They May Delete Your Work

By cwaltersMarch 7, 2008

Last week we wrote about the IRS’ free tax filing program and pointed you to a blog that reviewed all 19 services. Only two offer free state filing, but the blog, Flife, pointed out that you could always use your chosen service to prepare your state return—using it as a sort of worksheet—and then switch to one of the totally free services to do the actual filing. But be careful: a reader just wrote in to say free-tax-return.com completely deleted his state filing when he declined to pay the $13.50 fee.

I went to the IRS.gov website to file my free tax form since I made under $54,000 this year.

The IRS.gov website referred me http://free-tax-return.com, I spent a good 6 hours filling out the information and when my return was calculated I was happy to see I would receiving a refund for my federal taxes.

When I choose to submit my forms, It said that I would have to pay an extra $13.50 to electronically submit my state taxes.

Being a poor college graduate slowly paying off a $70,000 loan, I decided I would copy the information generated from the free-tax-return.com state forms and mail it myself.

To my surprise once I told them I wouldn’t be paying $13.50, my state forms were erased from my account. Now I need to re calculate everything again for the state tax forms.

In other words, if you’re going to try this approach to save some money, don’t expect the tax return service to save your work for you indefinitely. We suggest you hold off on the final submission step until you’ve got the work copied over to whatever 100% free service you choose—or keep both services open simultaneously, or print/screencap the necessary figures.

I used turbo tax thru the state farm insurance link (you have to have an account with state farm insurance to use the link)….. even recieved confirmation emails that the returns were confirmed, submitted & accepted .

In past years I would have turbo tax fill out my state forms & then print them out & mail them myself to the state.

A couple of years ago, I did a study on a bunch of online filings and ended up coming up with different refund amounts for state on every single one. I threw up my hands and did it on paper and came up with a completely different number. I haven’t e-filed state taxes since.

The Federal tax figures were fine. They pretty much all matched.

I’m providing a link to my original review of the sites (note, it’s really outdated given it was 2 years ago)

There’s no way I want to deal with all that identity theft fodder transferring back and forth to some server somewhere which I have no control over. Just do the taxes (while leaving data file on a thumbdrive) and lock up the data in a safe, physically separate from my computer.

In all fairness, they tell you this like 8000 times throughout the process… I tried to free file at 3 different sites trying to find one that would let me store data for free, ended up just paying for a TurboTax’s online service because it was 5 more bucks than ‘Free + Storage Fee.’

Before you even type in your name they tell you that you can’t store returns without paying.

I wish Turbo tax could see which state I entered on my return and which state I made my money in and NOT ask me no less than FOUR TIMES to pay for the state version. Texas has no state income tax and probably never will unless all the voters lose their minds and vote one in.

@forgottenpassword: I did the same thing. Since I have State Farm insurance, I signed up online to be able to view my account and was able calculate and e-file my taxes for free through their site. If any of you have State Farm insurance, I recommend doing this.